The 6th Annual Smart Utilities Central & Eastern Europe (CEE) conference and exhibition was held on May 14–15, 2013, in Prague. This year, more than 200 delegates (utility professionals, smart meter vendors, and telecommunications providers) gathered to share their experiences and discuss the challenges that need to be tackled to drive smart energy projects forward. With IDC Energy Insights being a proud Knowledge Partner of the Synergy-organized conference, I had the opportunity to chair an afternoon track on innovations and developments in smart energy infrastructure, and participate in sometimes heated discussions with this year's attendees during the two days.
Here are my key observations from the event:
1. Cautious progress of smart metering projects.
The Third Energy Package adopted back in 2009 has mandated a rollout of electricity smart meters where the national cost-benefit analysis (CBA) proves positive. This regulatory push originally turned Europe into one of the most promising smart meter markets. However, many countries in Europe are currently moving forward with smart metering more slowly than expected. Some have not yet even submitted results of their CBA (the deadline was September 2012) to the European Commission. So far, only 13 EU member states have decided to go ahead with a national smart meter rollout, or have already completed it.
In CEE, the smart metering market continues to be negatively affected by macroeconomic challenges, as well as delays in national regulatory frameworks. The complexity of issues pertaining to smart metering (financing, privacy, data security, and so on) has made the national discussions challenging, particularly as they need to result in sound national regulatory and legal frameworks guiding the rollouts.
According to the presented results of European Commission's Joint Research Centre, if we take into account the official commitments from the member states, or their expressions of strong interest in smart metering rollouts, it was stated that around €30 billion could be invested in smart metering across the EU by 2020 while installing about 170-180 million smart meters. Countries in CEE are still testing the smart metering technology, so market activity is expected to pick up in 2014/2015, with utilities in Estonia and Poland being the most active in smart meter deployment.
2. Achievement of the 2020 energy efficiency target is at risk.
Improvements in energy efficiency are among the three core goals of the EU climate and energy package, along with reduction of greenhouse gas emissions and higher share of renewables in the energy mix. Together, they aim to ensure that the EU meets its ambitious climate and energy targets for 2020.
As was presented at the conference, current forecasts show that the EU is not on track to achieve its target of reducing its energy consumption for 2020 by 20%. As a result, an energy efficiency directive has been adopted and put in force, establishing a common framework of measures for the promotion of energy efficiency within the EU in order to bring the EU back on track to achieve its objective by 2020. The directive brings forward measures to step up efforts to use energy more efficiently at all stages of the energy chain, by establishing energy efficiency obligations schemes or policy measures by May 2014. These will drive energy efficiency improvements in households, industries, and transport sectors.
3. Smart metering as energy saver.
If I were to summarize the most common key monetary benefits of smart metering debated during the conference, I would cite energy savings, reduced meter readings, and operational savings for the utility (e.g. technical and non-technical losses). Additional benefits are expected from the applications that smart meters will enable (e.g., demand response, new innovative services for consumers, etc.). We also learned that the CBAs carried out so far by the EU member states indicated energy saving as the main benefit of smart metering installations.
The explanation lies in the assumption that consumers will be more energy efficient if they know how much energy they consume in (almost-) real time. Even though smart metering does not automatically save energy, if linked with improved billing information that is based on actual consumption and provided frequently, it can give customers the tools they need to begin saving energy, thereby facilitating the behavioural aspects of energy saving. Billing information based on actual consumption must be provided frequently enough to enable customers to regulate their energy use and reduce energy wastage, as well as to encourage energy efficient behaviour among customers. Consumers will be better able to manage their energy consumption thanks to better information provided via their meters and bills.